Re: Pros and cons of permitting deferrments of property tax obligati
- Scott Bergeson wrote:
> Quoting Roy Langston on Wed, 30 Apr 2008 12:41:00 -0400(EDT):
>http://groups. yahoo.com/ group/LandCafe/ message/4712Right.
>[The rate of] interest on the outstanding
>amount due ... could be set based on the bond
>rate the community must pay for borrowed funds.
>>No, the rate must exceed the prevailing mortgage
>interest rate, or deferment will just be used to
>finance land speculation. In Vancouver, the average
>dwelling now costs over $500K (average SFD is closing
>on $1M), the rental vacancy rate is 0.5%, and power
>company records indicate that 18,000 condominiums are
>That's what a concessionary interest rate of 3%
>on deferred taxes does.
>I've missed a few things here:
>1) Vancouver charges 3% p.a. interest on deferred taxes?
>2) Vancouver pays 3% p.a. interest on bonded debt?No, it pays market rates for high-quality municipal debt.
3) Speculators are eligible for this concessionary rate?
Yes. All you have to do to be "eligible" is not pay your
>I would expect that Canada has "income" tax, and thatCanada and the province of BC both have income taxes, but
>both mortgage interest and property taxes are
>deductible from "gross income" before calculation of
>tax due. If presumption in error, please advise.
neither mortgage interest nor property taxes is deductible
anywhere in Canada, AFAIK. I don't know if US-domiciled
owners can deduct mortgage interest or property taxes paid
on property they own in Canada.
>While I concurAs explained above, that effect does not apply in Canada.
>about the inadvisability of extensive bureaucratic
>investigation into personal finances, nevertheless,
>most people who "need" (appraisal of that can become
>quite subjective, I know) the deferral usually owe
>no income tax or are ineligible for refund, so you'd
>be charging them a much higher real interest rate on
>the deferral than speculators (includes owner-
>occupied residential; especially, since they tend to
>be eligible for favorable mortgage terms) pay on their
>mortgages. Did you actually intend for this punitive
>(Note: this also makes mortgage finance unaffordableOf course. It should be obvious that the US mortgage
>and inappropriate for purchasers lacking substantial
>taxable income from which to deduct finance costs.
>A corollary would be that so long as "income" tax
>persists, LVT, Location Levy, or whatever you call
>it ought not be deductible, nor should mortgage
>interest on the land portion of the loan.)
interest and property tax deductions are just additional
ways to shovel money into landowners' pockets for doing
>Final note: Speculation on empty condominia seemsOf course it is. And your point would be...?
-- Roy Langston
Connect with friends from any web browser - no download required. Try the new Yahoo! Canada Messenger for the Web BETA at http://ca.messenger.yahoo.com/webmessengerpromo.php